A restaurant, not a tech company
The allure of exponential growth and big money collides with reality
Last week, the Wall Street Journal published some familiar analysis of Sweetgreen, the one-time salad darling that really wanted to be a technology company: “Sweetgreen can’t compete as a restaurant chain with a Silicon Valley cost structure,” it read.
Indeed. I argued in 2021 that Sweetgreen’s early success and subsequent stumbles around the time of its IPO were a defining moment in that conversation. Salad doesn’t scale like software, that is, but comparing itself with the technology industry, Sweetgreen was setting seriously unrealistic expectations for its growth and eventual profitability. During its IPO, with all eyes on the company, Sweetgreen’s leaders missed an opportunity to explain — and, frankly, to own — the differences between building a restaurant business and building a technology business.
In the week since the WSJ’s analysis, the phrase “Silicon Valley cost structure” has taken a reputational hit that the piece’s author probably didn’t anticipate. With the spectacular failure of Silicon Valley Bank, an institution aligned with technology and startup interests, the promise of disruptive technology and its support systems are up for fresh scrutiny. Outsiders (and skeptical insiders) may now find that not all its structures are worth emulating.
The era of restaurant-as-tech-company could be over. And after a booming few years, restaurant tech seems headed for a reset, too.
Big restaurant tech is fortifying its platforms.
The companies that have thrived under the banner of disruptive technology have already proven they will spare no expense to define policies.
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